You Are What You (Don’t) Eat

The food industry is being disrupted, not by robots or any other Fourth Industrial Revolution elements (although robot baristas and pizza makers are becoming more commonplace), but by shifting eating habits, and the vanguard is a younger, and therefore the next-generation shopper and diner. Acumen looks at the fast-changing taste buds of the modern consumer, the logistics involved in getting them

“So, you’re a limitarian then?” says Nick the deli owner where I’m purchasing my lunch, for which my default has suddenly become meat-free. I’m by no means a vegetarian, but of late, my dabbling with the concept of a “meat-free” Monday has naturally (and seamlessly) evolved into eating less meat. Far less, hence the term “limitarian”: I seemed to have inadvertently joined a growing global movement that is limiting their intake of meat and gravitating towards a plant-based diet.

There has always been a long-standing joke about vegans: “How can you tell if someone’s a vegan? Don’t worry, they’ll make sure you know.” Cheeky but true, and now the vegans will feel vindicated. Globally, veganism is on the rise. In 2006, a UK survey found that 150 000 people opted for plant-based diets. Today, over half a million do. That’s a 350% increase in just a decade, just in the UK. Add to this another three million vegetarians, many of whom are Gen Zs, and it’s clear that there is a seismic shift taking place in global food consumption.

One of the reasons for this switch comes from concerns raised by the World Health Organization on red meat consumption, as well as the growing empathy about animal welfare, both of which resonate, especially with a younger generation. Allergens are also contributing to the movement, which has spawned an umbrella hashtag – the #freefrom movement – ie: free from lactose, free from gluten, etc.

The younger demographic supporting the #freefrom movement, and the switch to plant-based diets, is significant. Another UK survey taken in 2016, by The Guardian, confirmed that close to half of all vegans are aged 15-34 (42%), compared with just 14% who are over 65. 67% of the survey respondents were under 34, and one-sixth were Gen Zs. The Vegan Society’s statistics corroborate these findings. Their research also shows that veganism in the UK has risen by 350% in the last decade with 42% of vegans being between the ages of 15-34.

Many (dedicated meat eaters) might write the movement off as a mere esoteric fad but the numbers don’t lie. For example, sales of Alpro almond milk have gone up by 2 343% since 2015. If you are in the food business, ignore them at your peril. This is a bellwether of change for the food industry.

Brands responding to the #meatfree or #freefrom movements

Hellmann’s has already created an egg-free mayonnaise, while Flora is now offering a non-dairy margarine. Popular sandwich chain, Pret A Manger, has gone as far as opening stand-alone vegetarian outlets, identifiable by the colour of their logo, switched to green.

Even fast food chains, under pressure for many years to offer healthier options, are tentatively testing meat-free options. McDonald’s in Finland is trying to appeal to this new market by testing a vegan burger.

Still need proof?

Over in America, Forbes reported that sales of plant-based food in the US rose by 8.1% in 2017, which translates into revenues of $3.1 billion, according to research carried out by Nielsen for the Plant Based Foods Association (PBFA) and the Good Food Institute. In line with the spike in Alpro almond milk sales, plant-based dairy alternatives are expected to reach 40% of the combined total of dairy and plant-based dairy alternatives in the next three years – up from just 25% in 2016 – and the alternatives include barley, hemp, pea, flax and quinoa.

But while supermarket suppliers are starting to stock new vegan-friendly product lines, the supermarkets themselves are responding quickly with their own range of meat-free, ready-made meals. From Walmart in America to Tesco in the UK, and even locally at Woolworths, supermarkets are responding to the increased demand, as are on-demand food delivery services, like UCOOK, which brings me to the next component of the food revolution – delivery.

The bricks and mortar retail sector might still be struggling to claw its way back from the “retail Armageddon” of 2017, but the on-demand food delivery business is booming, and competition is fierce. Battling for your too-tired-to-cook share of wallet locally are companies like Mr D, Uber Eats, OrderIn, Wazupa, King Delivery and Yumbi. The global food delivery boom has resulted in new business models, namely the rise of the dark kitchens, or virtual restaurants.

Dark kitchens, or virtual restaurants, are an alternate business model to restaurants. The on-demand food business has become so successful that restaurateurs, or aspiring entrepreneurs, are now debating the cost of overheads and administration of running a restaurant, compared to just running a kitchen that delivers food.

Hellen Gqoboka launched one of Johannesburg’s first virtual restaurants – Leles African Cuisine – in 2017. Her decision to forgo the tradition restaurant model came hot off the heels of Deliveroo’s global rollout of dark kitchens.

Deliveroo, a London-based company now operating in 140 cities in 12 countries, raised $385 million in new funding last year, giving it a valuation of “over $2 billion”. Not content with delivering food from restaurants, they are pioneering their own dark kitchens.

Deliveroo Editions is part of the company’s strategy to own more of this lucrative value chain. They assemble a cluster of shipping containers, each of which is repurposed as a kitchen. Each kitchen is fitted with grease filters, refrigerators and stoves, and the aim is to give smaller start-up restaurateurs a way to expand their businesses by moving into the kitchen and cooking exclusively for Deliveroo.

Restaurant owners who work in Deliveroo's dark kitchen then save significantly on overheads and are able to expand their reach without the costs of setting up new premises. They also benefit from the firm's social media, IT and marketing network. It’s a brilliant new business model.

But innovative ideas don’t have exclusivity for very long. In Singapore, a Goldman Sachs-backed competitor, Foodpanda, is expected to launch a similar model.

Food waste caused by “best before” dates and “ugly food”

We might be moving towards plant-based diets, but we seem to waste an awful amount of it. The Food and Agriculture Organization (FAO) reports that one-third of food produced globally for human consumption is wasted. That’s a staggering 1.3 billion tons of food wasted per year.

The food waste happens throughout the supply chain, from farm down to household consumption where consumers are swayed by “best before” dates or reject “ugly food”: perfectly edible foods that are avoided because they are naturally misshaped or slightly bruised. Farmers dump them. Supermarkets and restaurants reject them. Consumers avoid them simply because they don’t adhere to an irrational notion that all produce should be perfectly formed. But the tide is turning.

Flashfoodbox, an American fresh produce delivery company, added an Ugly Produce Box to their offering. The company simply approached their suppliers and asked if they could buy produce the grocery stores wouldn’t take.

Canada’s largest food retailer, Loblaws, launched a line of Naturally Imperfect fruits and veggies under their No Name house brand, which now offers 14 varieties of imperfect produce, both fresh and frozen.

In May this year, Tesco started to remove “best before” dates from fruit and vegetable products in an effort to reduce food waste because most people misunderstood “best before” guidelines. “Best before” date labels are used by retailers to show that food might not be at its best but is still edible, while “use by” labels indicate that there is a safety risk if food is eaten after a certain date. “Best before” dates are therefore about quality and not safety, and yet we throw it away.

Many people ask me, as a trend spotter, “if I was an investor, where would I put my money?” If I look at the components of this food revolution, then I’d have to say, “delivering a meat-free menu, made from ugly food, prepared in a virtual restaurant”.

And if you can’t stand the heat, then you’d better get out of the dark kitchen.

Info Box: [case study] How business is responding to the #meatfree movement

WeWork, the New York-based company that pioneered co-working spaces for gig workers, implemented a company-wide ban on meat in July this year. WeWork co-founder Miguel McKelvey informed his approximately 6 000 employees that the company will no longer serve meat at employee events or reimburse them for meals that include red meat, poultry and pork.

In his email to staff, McKelvey explained that “WeWork can save an estimated 16.7 billion gallons (63 billion litres) of water, 445.1 million pounds (201.9 million kg) of CO2 emissions, and over 15 million animals by 2023 by eliminating meat at our events.” He added, “In just the three days we are together, we estimate that we can save more than 10 000 animals.”

The trailblazing announcement is part of a new trajectory for big business to show their values and purpose by supporting environmental sustainability.

WeWork operates in more than 20 countries, is believed to be worth $20 billion, and has in 2018, raised another $152 million from investors. Their target is a $35-billion valuation, a price tag that would place the start-up above companies like Airbnb and SpaceX.

Dion Chang is the founder of Flux Trends.

For more trends as business strategy, visit www.fluxtrends.com

...one-third of food produced globally for human consumption is wasted...

Dark kitchens, or virtual restaurants, are an alternate business model to restaurants.

“In just the three days we are together, we estimate that we can save more than 10 000 animals.”